5 Ways to Encourage Your Savings Habit

Like so many things in life, setting money aside as savings is a habit that needs to be developed. If you want to see your nest egg grow, you need to do what you can to encourage a savings habit. Setting money aside needs to become a way of life, instead of some sort of burden.

If you are having trouble getting into the habit of saving, you should try these five ways to keep you motivated:

1. Set Achievable Savings Goals

One of the biggest issues is that you may not have a goal. You just have an idea that you need to save money, but there is no true purpose for your money. It’s hard to stay motivated when you have no clear idea of what the money is for. So it is much easier just to spend it.
Instead of pointlessly saving, create achievable savings goals that give purpose to your money. Whether you want to save $5,000 in the next six months for a vacation, or whether you want to save up five months of expenses by the end of the year for your emergency fund, having a realistic goal gives you something to work toward — and progress you can see.

2. Reward Yourself for Reaching Small Milestones

You can reward yourself at certain milestones depending on the length of your goal. This helps you track your progress, and also helps keep you motivated to continue saving. These rewards should be fun things you might not normally do, but that are still small and within reason. It might be a day off (if you can take a personal day at work), a picnic in the park, dinner at a nicer restaurant than usual, or some other enjoyable activity. Just don’t blow all your savings while enjoying your small reward.

3. Automate Your Savings

One of the easiest ways to get into the habit of saving is to set up some automatic method of moving your money around. Whether you have money from your paycheck automatically deposited into a savings account (including a retirement account), or whether you do an automatic transfer each month, automatically having your savings moved around can help you adjust your lifestyle to what you end up as “take home” pay. Soon you won’t miss the money, but it will still grow and work for you.

4. Don’t Sweat the Small Stuff

Always denying yourself the small treats you enjoy, and focusing on penny pinching, can bring you to hate saving. While you can cut back on some of those small expenses that eventually add up, you might actually feel better about saving if you focus on cutting back on the big expenses. Forgoing the big TV is an one time thing that can save you $700 to $2,000. And you can still get good entertainment on your current TV, or use the Internet. You will probably find that you will get over the TV pretty quickly and move on. However, telling yourself everyday how you can’t get that delicious $2 bagel you love can start to create resentful feelings toward saving. It’s a daily litany of denial that can start to make saving a chore.

5. Look for High Yield Accounts

One of the most depressing things about savings is how slowly the money grows. You can increase your satisfaction with savings by looking for high yield accounts. While yields are still generally low, you can still do better than the less than 1% offered by a traditional savings account. You can also look for alternative products like money market accounts and funds, high-yield CDs and bonds. However, be aware that some of these options may not be FDIC-insured, and come with greater risk.

Bottom line: Setting aside money for the future is important, but you need to find ways to keep yourself motivated. Do any of these things work for you? What keeps you motivated to save?

This article originally appeared on MoneyNing.com. Let us know what you think (or read what others thought) here.